London headquartered FX broker TigerWit has been awarded a financial services licence by the Hong Kong Securities and Futures Commission. The regulator, which was set up back in 1989, oversees all activity conducted by brokers, fund managers and other intermediaries in Hong Kong’s securities markets.
As part of that remit, they have oversight of the margin Forex business in the territory. Gaining authorisation from the HK SFC is crucial for a broker that wants to operate on the ground, in the special administrative region, as Hong Kong is known by the Chinese authorities.
The addition of a Hong Kong licence is part of TigerWit’s ongoing expansion plans, which have seen the group open several overseas offices, during the last year
Being able to operate in Hong Kong will provide a springboard from which TigerWit can offer its services to the populous and potentially profitable markets of Southeast Asia.
Online trading broker TigerWit will no doubt try to leverage its association with Liverpool FC, the current European and World football club champions, who they sponsor after all UK Premier League football is hugely popular in Asia.
As a financial centre, Hong Kong is also in the top tier. According to the 2019 BIS triennial survey which was published in September, daily FX turnover in Hong Kong rose by +44.8% between April 2016 and April 2019 to stand at US$632.1 billion, the territory also saw significant growth in the trading of OTC Swaps, Hong Kong has retained its crown as the largest centre for trade in China’s offshore Renminbi, both in currency and interest rate derivatives.
Commenting on the new licence TigerWit CEO Tim Hughes said
“Securing a licence from the Securities and Futures Commission of Hong Kong is a significant milestone for TigerWit and represents another crucial part of our roadmap achieved. By gaining this licence we are another step further on our journey to offering our innovative trading solutions globally. Being regulated in the right jurisdictions allows us to expand our operations, whilst ensuring that our clients are afforded the relevant protections.”
Being able to offer clients and prospective customers a choice of geographic locations and regulatory jurisdictions, from and through which to conduct their business, is a strategy that is being adopted by FX and CFD brokers with designs on a global footprint.
Headquartering and operating in London under an FCA licence carries a good deal of prestige, but it’s also important to be seen have a regional or local presence in Asia and for that presence to be in a well-regulated leading financial centre, such as Hong Kong.
There is an ongoing discussion in the industry as to whether overseas clients can best be served through regionally and locally based staff or from dedicated teams working in local time zones, but from a remote head office location.
The jury is still out on which approach is best but TigerWit is clearly following the former strategy establishing regional hubs and satellite offices.
FX and CFD broking can be in theory be conducted from anywhere in the world, that is both a benefit and a curse for the industry
Instinctively, it seems better to us when a broker has boots on the ground in an overseas location. Rather than trying to service it remotely, particularly when if they several time zones away, and never more so than when there are issues or queries that need resolving quickly.
So much that better then, if an overseas operation is overseen by a capable and respected regulator.
Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.